Audit of Medicare Administrative Costs Claimed by Blue Cross Blue Shield of Florida for Fiscal Years 1995 Through 1998

EXECUTIVE SUMMARY:

The objective of this review was to evaluate the reasonableness and allowability of costs claimed for reimbursement by the contractor on its final administrative cost proposals for the period October 1, 1994 through September 30, 1998.  We identified $5,158,255 of unallowable charges to the Medicare program and set aside $104,836,580 for the Centers for Medicare & Medicaid Services (CMS) resolution.  We also identified several areas where improvements in the contractor's internal controls and cost allocation system are needed.  We recommended that the contractor reduce its claim by $5,158,255,  provide documentation to the CMS contracting officer to support the allowability and allocability of the $104,836,580 of costs set aside, and implement various procedural recommendations to ensure that administrative costs charged to Medicare are allowable.  A follow-up report was issued on April 21, 2003 (report number A-04-03-02024).

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